LOS ANGELES — NASA and the organizers of the X Prize competition for private spaceflight on Friday signed off on a $2.5 million contest to promote rocket technologies that could be adapted for landing craft on the moon or suborbital jaunts on Earth.

The X Prize Foundation will manage the Lunar Lander Challenge on NASA's behalf — with the inaugural contest to be conducted during the X Prize Cup in New Mexico Oct. 18-21.

The contest represents the first of NASA's Centennial Challenges to offer a multimillion-dollar purse. The Space Act agreement cementing the deal was signed here during the International Space Development Conference in Los Angeles.

NASA Deputy Administrator Shana Dale told MSNBC.com that the point of the competition was to "take advantage of new innovative technologies that have been developed" since the last lunar landing, during the Apollo 17 mission in 1972.

"We're looking for creative technologies that will help us in the Vision for Space Exploration," she said, referring to NASA's plan to return humans to the moon by 2018.

Some of the details for the Lunar Lander Challenge are still to be worked out: For example, NASA is providing only $2 million for the prizes. Other sources will have to provide the additional $500,000 in prize money as well as funds to cover the X Prize Foundation's management costs.

The foundation's chairman, Peter Diamandis, told MSNBC.com that he wasn't yet ready to identify those sources. In the past, the Pentagon's Defense Advanced Research Projects Agency
has been mentioned
as a potential partner in X Prize-organized contests.

Also, the final rules for the Lunar Lander Challenge are still undergoing a final review and have not yet been posted, NASA said. The foundation said teams could nevertheless begin the registration process via e-mail or phone.

Diamandis said "as many as half a dozen" teams already have expressed preliminary interest in competing this October. He declined to identify the teams. However, Texas-based Armadillo Aerospace and California-based Masten Space Systems, two companies that have been working on vertical-takeoff-and-landing rocket vehicles, are widely thought to be among the early favorites.

Two levels of competition
The Lunar Lander Challenge calls for entrants to simulate a trip between the moon and low lunar orbit. There are actually two levels of competition, with both levels requiring the vehicles to fly from one area to another area and back, reaching a minimum altitude of 164 feet (50 meters). The two landing areas would be separated by 100 meters, or about the length of a football field. The vehicle may refuel before its return trip.

In the Level 1 competition, the vehicles must be in the air for at least 90 seconds during each leg of the round trip, and land on a flat, even surface. The Level 2 competition is harder — requiring 180 seconds of flight each way, with a rocky, lunar-style landing site.

Level 1 would offer $350,000 for first place and $150,000 for second place. Level 2 would offer $1.25 million for first place, $500,000 for second, and $250,000 for third, the X Prize Foundation said. If any prize is not won at this year's X Prize Cup, the leftover money would be rolled over to next year.

The unmanned craft in the contest could be controlled autonomously or by a remote operator. In the event of a tie, there would be a follow-up "fly-off," Diamandis said. The winner would be judged by how many takeoff-and-landing hops could be accomplished in a set time period.

Like NASA's Dale, Diamandis said he hoped the competition would produce new spacecraft designs that would be far more capable than the Apollo program's lunar module. "We're 30 years later, and we need to flow in new technology," he said. "It's not just knowing how to do it, it's knowing how to do it cheaper and more robustly."

The entrants are likely to leverage technologies that could be used for suborbital spacecraft as well as for NASA's lunar landers. Diamandis noted that the rocket requirements for the Level 2 competition were close to what would be needed for an actual lunar lander, as well as for a craft capable of reaching the edge of space.

Brant Sponberg, NASA's Centennial Challenges program manager, told MSNBC.com that the space agency might be interested in adapting vertical-takeoff-and-landing systems for suborbital research applications as well as lunar landings. Such craft could provide a microgravity environment for three to five minutes, filling a gap between parabolic airplane flights and orbital flights. "That's actually important from our point of view," Sponberg said.

The Lunar Lander Challenge takes its place among several other NASA Centennial Challenges, modeled after the $10 million X Prize
won in 2004
by the SpaceShipOne team.

NASA's previous challenges — for example, to develop stronger space tethers, workable beamed-power systems, better astronaut gloves or moondirt-digging machines — have been limited to purses of $250,000 each. But last year, Congress authorized NASA to begin offering much larger prizes, and the Lunar Lander Challenge is the first to be set under the expanded program.

So far, none of the challenges has produced a winner.

NASA also signaled that additional entrepreneurial opportunities are in the works:

The draft rules for yet another competition, currently known as the Rapid Reflight Challenge, should be ready for publication in the next week or so, said Ken Davidian, deputy program manager for the Centennial Challenges. The X Prize Foundation is in line to stage that contest at October's X Prize Cup as well, with a reported purse of $500,000. The competition would reward repeated launchings of a reusable rocket in a relatively short time frame, perhaps with a preference for nontoxic propellants.

Sponberg and Dale said a competition to promote technologies for lunar rovers was high on NASA's priority list for future Centennial Challenges.

Dale said NASA was working out the arrangements for its Red Planet Fund, a venture capital scheme reportedly modeled on the CIA's In-Q-Tel corporation. NASA hoped to use the concept "to attract and motivate private-sector innovators and investors who have not typically conducted business with NASA, or may not want to conduct business with NASA," Dale said. "We are expecting to make an announcement in May."

The X Prize Foundation says teams seeking to register for the Lunar Lander Challenge may contact Will Pomerantz via e-mail at will@xprize.org or call 310-587-3355.